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With a shortage of new housing construction inflating home prices across North Carolina in recent months, one community took steps Monday that could alleviate that trend for local would-be homebuyers.
Up to 250 houses could be built in far northeast Fayetteville after the City Council unanimously approved an annexation request, allowing the land for the potential development to receive city utilities.
Located just under 2 miles northeast of city limits on Ramsey Street and south of the Tractor Road, the 117-acre, noncontiguous plot is now zoned for single-family residential housing.
The developer intends to use the land for a low-density, single-family residential subdivision.
“We love to grow the tax base; we need homes,” Mayor Mitch Colvin said.
The annexation is effective immediately.
Increased supply lowers costs
In 2021, the median sales price of a single-family home in Cumberland County was $185,000, up from $156,000, an increase of over 18%, according to listing data from Longleaf Pine Realtors.
For new construction, like that approved by the council Monday, the median price was more than $284,000 in 2021, increasing by more than 9% from the previous year.
Increased home prices are part of a nationwide trend seen throughout the COVID-19 pandemic.
A study by government-backed lender Freddie Mac last year found that nationwide, the housing market faces a shortage of 3.8 million units. Much like other markets, the low supply drives up costs.
The study credited the shortage to rising demand for homes during the pandemic and a long-term decline in new construction of single-family houses.
With 250 homes set to be built in the newly annexed land, that would amount to nearly half of the 575 new single-family homes listed in 2021 in Cumberland County, according to Longleaf Pine Realtors. The year before, 609 new homes were listed.
Of the 575 new houses listed last year, 454 closed before year’s end. That’s down more than 27% from the 623 homes that closed in Cumberland County in 2020. However, the difference doesn’t come from a drop in demand, but a substantial decrease in new home construction last year. The annexed property stands to potentially reverse that construction trend in early 2022.
Like the rest of North Carolina and the entire country, demand for housing is increasing in Cumberland County.
In 2021, Cumberland buyers closed on over 5,760 existing single-family homes, an increase of nearly 17% from 2020.